Surge in turnover fails to halt Eidos loss

Eidos' interim loss increased despite the games company almost doubling turnover in the six months to 30 September.

The first half revealed a loss of #18.9 million from #18.3 million last time. But the rise was due to a #5.3 million charge on the value of a 15 per cent stake in Opticom, a Norwegian technology company that has been savaged on the Norwegian stock market over the past six months.

Another exceptional item referred to a #1.6 million charge for 'investigating potential acquisitions during the summer', believed to be Virgin Interactive and Psygnosis. Turnover was up 118 per cent to #47.6 million.

The core business faired better than Norwegian investments.

Charles Cornwall, chief executive of Eidos, stated: 'Our performance has remained strong in the second quarter due to a quality catalogue and continuing sales from our first-quarter releases. Eidos released seven titles in the first half, three of which achieved sales in excess of 350 units each.'

Despite the drop to seven titles sold from 10 in the same period last year, marketing and advertising spend soared from #2.4 million to #6.4 million. Eidos is also expected to receive a boost from the box office, when the film version of Tomb Raider is released next year. It estimates free publicity from the film to be worth #18 million.

The period also saw the completion of the Crystal Dynamics acquisition and the launch of Tomb Raider III in preparation for the Christmas boom time.

Nick Gibson, analyst at Durlacher, predicted the games company was on course for #185 million year-end sales, adding: 'The results are below what most analysts were expecting. They were clouded by exceptionals.

The most dramatic one being Opticom, but the share price for that has actually recovered substantially. The #1.6 million bill for the Psygnosis and Virgin talks, however, is a lot for negotiations.'